Loading...
See More

Apple wants speedy ban on Samsung phones

Aug 28 2012 10:30 Reuters

Related Articles

Apple gains $18bn as Samsung sheds $12bn

Samsung ordered to pay Apple $1.05bn

Court: Samsung, Apple infringed patents

Apple the world's most valuable company

Apple: Samsung had 'crisis of design'

Apple: The jury has spoken

 
New York - Apple is seeking speedy bans on the sale of eight Samsung Electronics phones, moving swiftly to translate its resounding court victory over its rival into a tangible business benefit.

The world's most valuable company wasted no time in identifying its targets on Monday: eight older-model smartphones, including the Galaxy S2 and Droid Charge. While Apple's lawsuit encompassed 28 devices, many of those accused products are no longer widely available in the world's largest mobile market.

Although Samsung's flagship Galaxy S III phone was not included in the trial, the jury validated Apple's patents on features and design elements that the US company could then try to wield against that device. Apple may not have to seek a new trial over the S III, but can include it in a "contempt proceeding" that moves much faster, according to legal experts.

Many on Wall Street believe Apple now has momentum behind it in the wake of its near-complete triumph over the South Korean company on Friday.

"The evidence and weight of the case are heavily in Apple's favor," said Jefferies & Co analyst Peter Misek. "We expect there's a two-thirds chance of an injunction against Samsung products."

An injunction hearing has been set for September 20. If US District Judge Lucy Koh grants sales bans, Samsung will likely seek to put them on hold pending the outcome of its appeal.

Samsung said it will take all necessary measures to ensure the availability of its products in the US market. A source familiar with the situation said Samsung has already started working with US carriers about modifying infringing features to keep products on the market should injunctions be granted.

Apple's win on Friday strengthens its position ahead of the iPhone 5's expected September 12 launch and could cement its market dominance as companies using Google's Android operating system - two-thirds of the global market - may be forced to consider design changes, analysts say.

Apple was awarded $1.05bn in damages after a US jury found Samsung had copied critical features of the iPhone and iPad. The verdict could lead to an outright ban on sales of key Samsung products.

Apple's stock scored another record high on Monday.

While the victory does not cover new Samsung products including the Galaxy S III, Apple will push its case on these products in the near-term, Evercore Partners analyst Mark McKechnie said.

"While a ban would likely increase Apple's leading smartphone share in the US market, we believe this verdict could lead to Samsung also delaying near-term product launches as it attempts to design around Apple's patents," Canaccord Genuity analysts said in a note.

Tooth-and-nail

Apple's shares gained 1.9% to close at $675.68, tacking on another $12bn-plus to its already historically leading market value. Samsung lost about the same amount in market capitalization as its shares slid 7.5% in Seoul.

Samsung shares rebounded 1.8% on Tuesday.

"The ruling marks an important victory for Apple against Android. Competitors may now think twice about how they compete in smart mobility devices with the industry's clear innovator," Barclays analyst Ben Reitzes wrote on Monday. "If Apple forces competitors to innovate more, it could take longer for competitive products to come to market, and make it more expensive to develop them."

The victory for Apple - which upended the smartphone industry in 2007 with the iPhone - is a big blow to Google, whose Android software powers the Samsung products found to have infringed on patents. Google and its hardware partners, including the company's own Motorola unit, could now face legal hurdles in their effort to compete with the Apple juggernaut.

Google shares closed 1.4% lower at $669.22. Microsoft, a potential beneficiary if smartphone makers begin to seek out Android alternatives, ended up 0.4%. Nokia, which has staked its future on Windows phones, gained 7.7%.

Even Research in Motion - which has hemorrhaged market share to Apple and Google - climbed more than 5%, before ending 2% higher.

"The mobile industry is moving fast and all players, including newcomers, are building upon ideas that have been around for decades," Google responded in a Sunday statement. "We work with our partners to give consumers innovative and affordable products, and we don't want anything to limit that."

The verdict came as competition in the device industry is intensifying, with Google jumping into hardware for the first time with the Nexus 7 and Microsoft's touchscreen-friendly Windows 8 coming in October, led by its "Surface" tablet.

Samsung, which sold around 50 million phones between April and June - almost twice the number of iPhones - will have to pay damages equivalent to just 1.5% of the annual revenue from its telecoms business.

"The verdict does not come as a surprise," wrote William Blair & Co analysts. "From Apple's perspective, Samsung's market position and its leadership in the handset world was something the company could no longer overlook, and viewing this as another 'imitation is a form of flattery' was not possible."

"Companies such as Samsung, who we categorize as fast followers, have been viewed by the industry for their ability to quickly adopt the latest handset trends ... rather than their ability to introduce fundamental innovation." 

* Follow Fin24 on Facebook, Twitter and Google+.


samsung  |  apple  |  smartphones
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...